EconPapers    
Economics at your fingertips  
 

New Financial Development Indicators: With a Critical Contribution to Inequality Empirics

Simplice Asongu ()

The International Journal of Economic Behavior - IJEB, 2014, vol. 4, issue 1, 33-50

Abstract: The employment of financial development indicators without due consideration to country/regional specific financial development realities remains an issue of substantial policy relevance. Financial depth in the perspective of money supply is not equal to liquid liabilities in every development context. This paper introduces complementary indicators to the existing Financial Development and Structure Database (FDSD). Dynamic panel system GMM estimations are applied. Different specifications, non-overlapping intervals and control variables are used to check the consistency of estimated coefficients. Our results suggest that from an absolute standpoint (GDP base measures), all financial sectors are pro-poor. However, three interesting findings are drawn from measures of sector importance. (1) The expansion of the formal financial sector to the detriment of other financial sectors has a disequalizing income effect. (2) Growth of informal and semi-formal financial sectors at the expense of the formal financial sector has an income equalizing effect. (3) The positive income redistributive effect of semi-formal finance in financial sector competition is higher than the corresponding impact of informal finance. It unites two streams of research by contributing at the same time to the macroeconomic literature on measuring financial development and responding to the growing field of economic development by means of informal financial sector promotion and microfinance. The paper suggests a practicable way to disentangle the effects of the various financial sectors on economic development. The equation of financial depth in the perspective of money supply to liquid liabilities has put on the margin the burgeoning informal financial sector in developing countries. The phenomenon of mobile banking is such an example

Keywords: Financial Development; Shadow Economy; Poverty; Inequality; Africa (search for similar items in EconPapers)
JEL-codes: E00 G20 I30 O17 O55 (search for similar items in EconPapers)
Date: 2014
References: Add references at CitEc
Citations View citations in EconPapers (3) Track citations by RSS feed

Downloads: (external link)
http://ijeb.faa.ro/download/482_3%20(14-03)%20-%20Asongu%20bibl.pdf (application/pdf)
http://ijeb.faa.ro/en/article/New-Financial-Develo ... ty-Empirics~482.html (text/html)

Related works:
Working Paper: New financial development indicators: with a critical contribution to inequality empirics (2013) Downloads
Working Paper: New financial development indicators: with a critical contribution to inequality empirics (2013) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:but:ijebfa:v:4:y:2014:i:1:p:33-50

Access Statistics for this article

The International Journal of Economic Behavior - IJEB is currently edited by Fabio Musso

More articles in The International Journal of Economic Behavior - IJEB from Faculty of Business and Administration, University of Bucharest Contact information at EDIRC.
Series data maintained by Cosmin Catalin Olteanu ().

 
Page updated 2017-06-24
Handle: RePEc:but:ijebfa:v:4:y:2014:i:1:p:33-50